D&L Industries Inc. expects an even stronger second half after posting higher profits in the first half of 2026, driven by improved second-quarter performance amid recovering consumer spending and lower coconut oil prices.

In a media briefing on Wednesday, Aug. 5, D&L President and Chief Executive Officer (CEO) Alvin D. Lao said, “In the last couple of weeks, the traffic seems to have returned. There are a lot of people in restaurants and malls. So, it seems like it [consumer spending] is coming back a little. So, that’s a sign. It looks like the consumer economy and our food ingredients business as well is getting better.”

“Meanwhile, the gradual normalization of coconut oil prices is a welcome development. Our food ingredients business delivered a significant turnaround in the second quarter of 2026, which we believe signals that earnings have likely bottomed and reached an inflection point. As raw material costs stabilize and our portfolio optimization initiatives continue to gain traction, we are optimistic about the segment’s ability to deliver more stable and improved profitability moving forward,” he added.

Lao noted, “2026 has remained a challenging year thus far, marked by geopolitical tensions, supply chain disruptions, elevated inflation, and higher interest rates. Despite these headwinds, the company was able to grow its earnings by eight percent in the first half of the year.”

“Overall, we remain confident in the long-term prospects of the business. While prevailing macroeconomic uncertainties continue to weigh on market valuations and liquidity, they have also created opportunities to acquire high-quality businesses at attractive valuations,” he said, noting that the Lao family’s investment arm, Jadel Holdings Co. Inc., has increased its stake in D&L by approximately 4.4 percent since the pandemic.

At current levels, the stock continues to offer an attractive dividend yield of approximately 6.7 percent and, based on current performance, Lao said the company will be able to sustain dividends equivalent to 65 percent of the previous year’s net income, consisting of a 50-percent regular dividend and a 15-percent special dividend.

D&L reported an eight-percent increase in net income to ₱1.5 billion for the first half of 2026, with second-quarter profit rising 10 percent year-on-year to ₱786 million despite the challenges posed by the Iran war.

“With coconut oil—one of our key raw materials—stabilizing at around $2,100 per metric ton (MT) after a prolonged period of volatility, margins continued to recover in the first half of 2026. The recovery was particularly evident in the high margin specialty products (HMSP) segment, where gross profit margins (GPM) expanded by 2.1 percentage points (ppts) during the period, reflecting easing input cost pressures alongside continued price pass-through,” Lao explained.

Meanwhile, the sales mix shifted modestly back toward HMSP, which accounted for 51 percent of revenues in the first half of 2026. As the company continues to allocate a significant portion of its resources toward developing HMSP, management expects HMSP to account for an increasingly larger share of the sales mix over time.

Meanwhile, D&L’s specialty plastics segment continued to deliver a solid performance, with earnings increasing 24 percent year-on-year, driven by 27-percent volume growth and a 0.3-ppt expansion in gross margins.

Consumer products original design manufacturer (ODM) also continued to deliver strong growth, with earnings increasing 27 percent year-on-year, driven by seven-percent volume growth as the plant in Batangas province continued to ramp up.

Export sales now account for 19 percent of total segment revenues, up from virtually zero five years ago, highlighting the company’s successful execution in expanding its presence in international markets.